ATT's Allen: Remove Barriers, We'll Cut Rates

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ATT's Allen: Remove Barriers, We'll Cut Rates

Nearly one year after the Telecom Act's enactment, AT&T CEO Robert Allen pledged that his company would offer the same or lower phone rates than local phone companies once regulators eliminate barriers to competition in the US$100 billion local phone market.

"Let me share a pledge with you: If and when AT&T is permitted to offer combined local and long-distance service throughout America, we will offer those services at prices no greater and probably less than what customers are paying separately for those services right now."

Allen spoke Tuesday at the National Press Club in Washington, DC, and blamed the reluctance of GTE and the local Bell companies to relinquish their holds on the local market as a major reason phone rates haven't gone down as a result of the Telecom Act.

"Today's local monopolists have crafted a deliberate shell game," he said. "They speak forcefully about the value of competition, but then cry, 'The sky is falling,' every time competition gets closer," he said.

Allen's promise hinges upon whether the company can get regulators to force GTE and local Bell companies to share the market. That, in turn, would improve competition and depress rates. The company has already appealed to regulators in all 50 states for the opportunity to serve local areas, a market it hasn't ventured into since its 1984 breakup.

The AT&T CEO also expressed concern over some of these local-market providers merging into larger companies, saying it would counteract the act's intent.

"The authors of the legislation had visions that the regional Bell companies and other monopolists would use their new freedom to compete with each other," Allen said. "But they seem more interested in circling the wagons and protecting even bigger monopolies."

Allen also vowed to pass along any cuts in access fees charged by local phone companies to consumers who use other long-distance providers - something he claims costs consumers up to $10 billion a year in excess charges.

Despite the company's frustration with breaking into the local markets, Allen dismissed any notion of having Congress revisit the telecom issue or of scrapping the rules implementing the law.

"If the government and the communications industry were to retreat from the challenge of implementing the Telecommunications Act, that would strengthen the hand of the existing monopolies. Worse, it would lay the groundwork for even bigger monopolies," he said.